Investment Tips for College Grads, Part 1, by Trevor Mooney

After finishing college and finding your first job, the temptation to splurge on all the toys you’ve always wanted can be huge. Yet by taking a responsible approach to financial planning and investing in the future now, you can ensure that you will get to enjoy the fruits of your work not only today, but for years to come. These tips should put you on the right track.

1. Create a budget The first step to starting off your investment venture is to make a budget. This should include all of your regular expenses like rent, car payments, gas, groceries, eating out, transit passes, health care, and so forth. Also make sure to budget for unexpected emergencies and save a little extra for entertainment as well. Budgeting doesn’t have to mean total deprivation; it’s just a responsible look at your finances.

2. Fix your credit score Many college grads wrack up excessive credit card debt due to the difficulty of surviving on a student budget. Make repaying your credit cards a top priority in your budgeting. The larger you can make these payments, the better for your long-term financial health. It makes no sense to put money into the stock market or a mutual fund while you pay 20 percent interest on a credit card.

3. Pay off your student loans Although not as extreme as credit card debt, student loans can add up if you do not figure them into your budget. You probably want to start investing before your student loan is completely paid off, but set yourself a realistic payment plan. Figure out how much interest you will be paying, and decide if the long-term returns from your investments will outweigh the loan interest payments or not. You can find free financial calculators online to help you with this task.

— A graduate of the University of Delaware Lerner School of Business, Trevor Mooney studied economics. He was also a member of the Blue Hen Investment Club.